Lawyers arguing the Ontario Securities Commission’s case against Home Capital Group Inc. pushed to expedite the potentially-lengthy proceedings at an opening hearing Thursday.
Since the OSC allegations were announced, the company, which is Canada’s largest alternative mortgage lender, has seen investor confidence erode and a partial run on its funding, with clients pulling money out of high interest savings accounts with Home Capital’s subsidiary, Home Trust.
The balances of these accounts — which have fallen from $1.4 billion on April 24 to $391 million on May 1 — help Home Capital fund mortgage lending, primarily to those who do not qualify for loans at traditional banks.
Shares of Home Capital were closed at $6.01 in Toronto on Thursday, down more than 72 per cent since April 19.
Ouch! The shares went down to just under $6 last week and then spiked by 35% in one day. There must be a few happy day traders out there. Though, long run appears bleak for HCG. Let's see how this impacts the broader market.